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Home Latest News Business Major gaming conglomerate Nixon prepares to acquire Bithumb

Major gaming conglomerate Nixon prepares to acquire Bithumb

Crypto exchange Bithumb looks like it's set on turning over a new leaf through an acquisition by one of South Korea's top gaming firms.

According to South Korean media on Jan. 7, Nexon, a multi-billion dollar gaming conglomerate, has signed a memorandum of understanding (MoU), to acquire the exchange at an evaluated price of 650 billion won ($460 million). 

Nexon, led by CEO Kim Seoung-Ju, will allegedly work with one of the major shareholders in Bithumb, Vidente, to buy out the exchange and take control of the company, crypto journalist and Cointelegraph contributor Joseph Young has summarized. Nexon aims to take a 65% stake in Bithumb, according to South Korean media.

The report notes that Bithumb’s existing shares are trading at a total value of 1 trillion won ($914 million) on the over-the-counter market, meaning that the deal, if successful, will allow Nexon to take over at a “discounted price.”

As reported by Cointelegraph, the sale of the exchange has allegedly been in the works since late August 2020, with a preliminary bidding held in September at which a number of financial and strategic investors, including domestic and foreign private equity fund managers, bid for success. 

It seems that the ongoing police investigation involving Lee Jung Hoon, chairman of board at Bithumb Korea and Bithumb Holdings, appears to have slowed down the process.

The report also indicates that the legal entanglement of the exchange’s current shareholders, who are being sued for embezzlement by investors, could make it difficult for the exchange to secure the legally required registration as a crypto entity with South Korean authorities.

Young has stated that Nexon’s acquisition would, more generally, “improve the image around the most dominant crypto trading platform in the local market.”

Nexon’s holding company, NXC, has previously invested in cryptocurrency and fintechs, including the well-known exchange Bitstamp. Given Bithumb’s prime position as South Korea’s largest crypto exchange by trading volume, Nexon’s market dominance is expected to benefit if the acquisition is successful.

The number of subscribers to Bithumb allegedly exceeded 5 million in the third quarter of 2020. The company is also said to have plans to expand its products and upgrade its compliance measures in the hope of securing a virtual asset business license. 

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